A crane topples at East 51st Street, and wrecks the development of a big building.  In the fallout, three legal malpractice law suits ensue, with many big-name attorneys suing or being sued.  How do the cases all fit together for trial?

Arbor Realty Funding, LLC v Herrick, Feinstein LLP  2013 NY Slip Op 51210(U)   Decided on July 24, 2013  Supreme Court, New York County  by Justice Edmead  lays out the principals and holds for complete consolidation.

"In support of consolidation, Herrick (and Gourlay) argue that all three actions should be consolidated as they all share common questions of law and fact arising from malpractice relating to the same zoning issues at the same Project.[FN6] Like Arbor, the Developer alleges that because of the defendants’ participation in the zoning issues, the Developer was ultimately unable to obtain construction financing, and therefore, defaulted on its loans to Arbor. The crane collapse, Mitzner’s opinions (from the outset and subsequent to the crane collapse), and the economic downturn which affected the New York real estate market overlap in all three cases, such that a finding of negligence against any of the defendants would affect the causation analysis with respect to Arbor’s losses. There is also a substantial overlap of the parties, witnesses and evidence.

In addition, consolidation would promote judicial economy by avoiding multiple depositions of the same witnesses on the same issues. It would also save unnecessary costs and prevent delay. Since no depositions have taken place in any of the three cases, consolidation would allow the witnesses, parties and non-party subpoena recipients to be heard once.

Furthermore, consolidation is necessary to prevent any injustice that would result from [*5]divergent decisions, as the court would be forced to analyze the zoning issues, weigh the reasonableness of the professional zoning advice in light of the surrounding circumstances and determine the causation issues in each of the three actions, based on the same set of facts. "

"Pursuant to CPLR § 602(a), when actions involving a common question of law or fact are pending before a court, the court "may order a joint trial of any or all the matters in issue, may order the actions consolidated, and may make such other orders concerning proceedings therein as may tend to avoid unnecessary costs or delay" (CPLR 602 [a]). While it is not necessary that all rules and all facts be common to both actions, "[t]here must at least be some important rules of law and some substantial issues of fact to be determined that are in common to both actions" (Siegel v Greenberg, 85 AD2d 516, 444 NYS2d 622 [1st Dept 1981], citing Gibbons v Groat, 22 AD2d 996, 254 NYS2d 843 [3d Dept 1964]). Indeed, consolidation is mandated by judicial economy where two lawsuits are intertwined with common questions of law and fact (Teitelbaum [*8]v PTR Co., 6 AD3d 254, 774 NYS2d 699 [1st Dept 2004] (consolidation warranted where both actions arose out of the same partnership agreement, the parties to each possess knowledge and information relevant to the claim in the other, and the lists of potential witnesses in the two cases are almost identical) (emphasis added)).

Further, consolidation is generally favored by the courts "in the interest of judicial economy and ease of decision making where there are common questions of law and fact, unless the party opposing the motion demonstrates that consolidation will prejudice a substantial right" (Amcan Holdings, Inc. v Torys LP, 32 AD3d 337, 340 [1st Dept 2006], citing Amtorg Trading Corp. v Broadway & 56th St. Assoc., 191 AD2d 212, 213 [1st Dept 1993]). The burden of demonstrating prejudice to a substantial right is on the party opposing consolidation (Progressive Ins. Co. v Vasquez, 10 AD3d 518, 519 [1st Dept 2004]; Geneva Temps Inc. v New World Communities, Inc., 24 AD3d 332, 334 [1st Dept 2005]).

At the outset, it cannot be disputed that Arbor’s actions against Herrick and Gourlay Actions share the same plaintiff (Arbor), and are premised upon the same (allegedly mistaken) Gourlay Opinion which served as a critical basis for Arbor’s loan to East 51st Street, whose default allegedly caused Arbor significant monetary damages. Notably, no party offered any meaningful opposition to the consolidation of these two actions. Therefore, these two actions (the "Arbor actions") are consolidated for all purposes."
 

"Further, common questions of fact exist concerning the accuracy of the same zoning opinion allegedly rendered and/or endorsed by each of the defendants, i.e., that the "tower" could [*9]be built, as proposed, on the lots in question. This zoning opinion, allegedly endorsed by Cozen/Blank Rome (via Mitzner) in East 51st Street’s action, and by Herrick/Gourlay in Arbor’s actions, which caused East 51st Street to borrow, and Arbor to lend, funds to finance the Project is a critical, material fact shared in all actions. Mitzner’s legal advice in forming the opinion, with Gourley, that the "tower" could be built, as proposed, on the lots in question, is the common thread woven in the fabric of each action.

Critically, Arbor’s cases against Herrick and Gourlay stemming from the advice Herrick gave during the limited time period of the loan process, are not materially different from East 51st Street’s case against Cozen/Blank Rome, which involves advice Cozen/Blank Rome gave to build a project that "evolve[d] overtime." (Transcript, p.36). The advice given by Mitzner (of Cozen/Blank Rome) to East 51st Street at the outset of the Project and before the loan was pursued, later resurfaced when Mitzner allegedly consulted with Herrick to obtain the certification from Gourlay during the loan process. Contrary to Arbor’s contention, the issue of "did you [Herrick] give proper zoning advice or not" or "should you [Herrick] have told me that the advice you were giving me was aggressive" (Transcript, p. 36) is intertwined, and interdependent on whether the opinion given, i.e., the Gourley Opinion (allegedly created with the assistance of Mitzner of Cozen/Blank Rome), was proper, which is the very issue in the Developer’s case. As shown by the parties’ efforts at consolidated document and deposition discovery, there is a significant overlap of witnesses and documents common to each action.

And, although the parties on the plaintiffs’ side, and the parties on the defendants’ side, are different, it has been stated if "it is otherwise proper, a consolidation will not be denied because the parties involved are not identical" (MCC Funding LLC v Diamond Point Enterprises, LLC, 36 Misc 3d 1206(A), 954 NYS2d 760 (Table) [Sup. Ct., Kings County 2012] citing Philip Shlansky & Bro., Inc. v Grossman, 273 AD 544, 546 [1st Dept 1948]). Further, while it cannot be disputed that the plaintiff in the Developer Action was the "borrower," and the plaintiff in the Arbor actions was the "lender," each of which served different purposes with respect to the Project, each had the same interest in the legitimacy of the Opinion that "tower" could be built as planned and represented by Mitzner. Due to the interdependency and relationship of the different defendants (and Mitzner), whose alleged acts and omissions affected the coordination and financing of the Project, and who allegedly coordinated their opinions to complete the Project, consolidation is warranted, notwithstanding that the plaintiffs are the lender and borrower of this Project. "